DePasquale: Turnpike debt is long-term transportation issue

By Jim T. Ryan,
January 10, 2013 at 11:00 AM
- Last modified: January 10, 2013 at 11:36 AM

Pennsylvania's Auditor General-elect, Eugene DePasquale, said Wednesday that the Pennsylvania Turnpike Commission's rising debt is connected to the state's long-term transportation funding problems and the state needs to take that into consideration when it addresses the issue this year.

DePasquale said he will continue to look into those issues when he takes office Jan. 15.

“My role would be to make sure that people don’t forget the debt issue as we talk about transportation funding,” he said.

Pennsylvania Auditor General Jack Wagner released an audit report of the turnpike’s finances Jan. 8, in which his office found six findings and made 20 recommendations for improvement. The findings were:

• The turnpike’s use of interest rate swaps and fees paid on that debt cost the commission nearly $109 million between 1998 and 2011. Wagner suggests the commission should transition that debt to fixed-rate financing as soon as possible to stabilize the debt, reduce interest costs and fees.

• The commission let employees ride the turnpike toll-free, even for personal travel.

• Commission provided more than $4.1 million in toll-free travel to nearly 5,000 consultants, contractors and other state government officials.

• The E-ZPass system was actively monitored to ensure correct fares are charged.

• The commission monitors, maintains and inspects tunnels but hasn’t implemented fire-detection systems in two of the five tunnels. It uses project-management practices that ensure recommendations from tunnel inspections are not overlooked.

Wagner also continues to point out that the turnpike’s long-term debt is tied to its obligations under Act 44, the 2007 state law to address transportation funding by requiring the turnpike commission to make annual payments of $450 million to the state for roads, bridges and other transportation projects.

What makes Act 44 largely untenable for the commission is that it originally envisioned the tolling of Interstate 80, which would have been managed by the commission and provided new revenue for transportation projects in the state. But the federal government rejected plans to toll I-80 in 2010.

Wagner also pointed out that tolls on the turnpike have been raised five times since 2007, the same number of times as from 1940 to 2004.

“The topic areas of the audit findings and recommendations … suggest that the Turnpike is a well-run operation given our areas of responsibility, breadth of geographic coverage and age of the system,” the turnpike commission’s acting CEO Craig R. Shuey said in a statement. “While we disagree necessarily upon the weight of each of your recommendations, it is clear to me that when system safety and provision of services are considered, the Pennsylvania Turnpike Commission is performing as should be expected.”

Shuey said in the statements that the turnpike is in the process of improving its accountability on nonrevenue travel and working to improve other performance issues noted in the audit.

A copy of the commission’s full response to the audit can be found here.

Many of the financial issues in the turnpike audit are clearly related to Act 44, which is not viable without I-80 tolling, DePasquale said.